The IRS has lost a decision in which the plaintiff argued that a decision in a non-FOIA that certain privileges were not available for documents estopped the IRS from arguing that the same privileges were still applicable in the FOIA context.
The case of Stonehill v. Internal Revenue Service involves records created in the 1960's. The estate of Stonehill is currently trying to reverse a previous tax judgment against it, and is seeking the documents in numerous forums to assist in this fight.
The IRS argued that documents it withheld were exempt pursuant to FOIA exemptions 5, 6 and 7(C). Plaintiff contested these exemptions, and in many cases, the Court agreed with plaintiff.
Judge John D. Bates of the District Court for the District of Columbia has held that collateral estoppel (issue preclusion) denies the IRS from asserting exemption 5 privileges that were previously denied in a non-FOIA Federal Rules of Civil Procedure Rule 60(b) case. In other words, if the IRS lost its privilege arguments in another court, even if it wasn't a FOIA case, they can't assert those privileges in the FOIA matter. However, the IRS did not waive other privileges or withholdings on where those privilege/withholding arguments were not previously made.
The IRS also lost its argument to withhold certain information pursuant to FOIA exemption 6/7C (the privacy exemptions). The IRS was attempting to withhold the names of certain IRS special agents. The Court found that the government failed to show a privacy interest in one agents name where, in this case, other agents have been previously identified in the matter. Thus, the Court concluded, the public interest asserted by the plaintiff is greater than the negligible privacy interest identified by the government.